When "Slow and Boring" Is Good

Louis Sykes
September 28, 2022

From the Desk of Louis Sykes @haumicharts

There's a lot that we can learn from Warren Buffett, who many consider to be one of the greatest investors of all time.

One of the most important lessons of all of them is that there are no called strikes on Wall Street. In other words, in liquid markets, you're not penalized for “missing” a trade.

The market doesn't guarantee traders much. But we can be certain there will always be future opportunities. We're not venture capitalists running rounds on private companies where a single deal can make or break our year.

Instead, we operate in public markets, where there will always be a multitude of setups.

In other words, we're not penalized for not swinging like we are in baseball.

Closer to home in New Zealand, baseball isn't a thing over here. Instead, we play cricket -- the formal man's baseball.

In week-long cricket test matches, players understand the virtue of patience; slogs and boundaries are a rarity. Batters chip away singles and doubles, which, over time, yields a safe tally of runs. It's the bowler's job in these long test matches to place the ball in a deceiving line where the batsman will edge the ball to the slips.

It's a game where patience is in a fight against the temptations brought upon by the bowler's deceit.

As traders and investors, we aren't naturally hardwired to be intelligent investors. We've been built over the millennia through natural selection to survive a harsh world. Every day, when we're putting money to work we're fighting psychological biases that hinder our objective decision-making processes.

One temptation we face is the perceived need for intensity.

We're predisposed to the irrational mindset that inaction always harms progress; this is on full display in the FOMO-inducing crypto market. The particular culture of the crypto community can make it appear that there are always viable opportunities everywhere. It's an easy trap to fall into.

But don't let this get under your skin. Most of the time, there's nothing to swing at. As trite as it may sound, the ability to sit on the sidelines often differentiates great traders from mediocre ones.

People like to give cricket a hard time for being slow and boring.

If people had that same attitude to putting money to work, there's no doubt in my mind that they'd be better off.

Thanks for reading, and please reach out if you have any questions.

 

 

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